Auto insurance agents in North Carolina have a duty to exercise reasonable care, skill and diligence in procuring insurance for clients, and the agent will be liable for any proximate loss resulting in the agent’s negligent failure to do so. (See Kaperonis v. Underwriters at Lloyd’s, London, et. al., N.C. App., 1975).
This does not mean insurers have to sell or direct you the “best” plan, but they do have to inform you of your options, the applicable costs and then secure the coverage you request.
The same degree of duty is recognized in many states across the country, Illinois being one of them. There, in the recent case of Skaperdas v. Country Cas. Ins. Co., the Illinois Supreme Court held an auto insurance agent (and by proxy his employer) could be liable for negligence in failing to procure the proper insurance for a client, who later reported a claim that should have been covered but was not.
According to court records, plaintiff first secured auto insurance through defendant company in 2006. Some time after that, plaintiff’s fiancee was involved in a crash while driving one of plaintiff’s vehicles. The insurance company said it would cover the loss, but to do so it would require plaintiff to add his fiancee as an additional driver onto the policy.
Plaintiff set up a meeting with the insurance agent for this purpose and the agent prepared the policy. However, when the agent prepared the policy, the fiancee was not included as a named insured. There was a reference on the declarations page identified a female driver between the ages of 30 and 64.However, she wasn’t named.
Sometime after the new policy was issued, the fiancee’s son was seriously injured when he was struck by a car while riding his bicycle. The at-fault driver only carried $25,000 in auto insurance coverage, which was nowhere near enough to cover the child’s medical expenses alone.
Because bicycle-versus-vehicle accidents are still considered “car accidents” where auto insurance is concerned, the family filed a claim for underinsured motorist coverage to compensate for the difference.
However, the company denied the claim, noting neither the fiancee nor the child were listed as named insureds on the policy. Plaintiff was confused. He’d ordered that policy. He’d met with the agent. Why wasn’t his fiancee a named insured?
As his lawsuit would later allege, the auto insurance agent was negligent in failing to procure insurance coverage requested by plaintiff, who asserted the agent owed a duty to exercise ordinary care and skill in renewing, procuring and placing the requested insurance coverage as required by state law. Plaintiff further alleged the insurance company was liable for the omissions or acts of its agents under the legal theory of respondeat superior.
Defendants countered they owed no duty of care to plaintiffs. Trial court granted the motions to dismiss, but the Illinois Supreme Court reversed, finding the agent did owe an ordinary duty of care. The court did not decide whether defendant had in fact breached that duty, but the case has been remanded back to trial court for further proceedings.
When you don’t receive the auto insurance coverage you requested, you may have a strong civil claim for damages.
Contact the North Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.
Skaperdas v. Country Cas. Ins. Co., March 19, 2015, Illinois Supreme Court
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Lemley v. Wilson – Liability in Roadside Work Crew Death Case, March 29, 2015, Charlotte Car Accident Lawyer Blog